When it comes to occupying news headlines, we’ve seen a lot from Netflix recently- and not all of it positive. Despite the strong interest in its soon-to-launch advertising tier, its inability to up its subscriber numbers in 2022 has remained a sticking point for its stock and investors alike. Finally, we see some positive upward movement. Our entertainment lawyer and industry expert, Brandon Blake from Blake & Wang P.A, unpacks the figures.
A Major Turnaround
The third quarter sees Netflix add 2.4M subscribers to their pool, the first upward tick of the year. This brings its total to a little over 223 M subscribers. Additionally, they are projecting further upward growth of 4.5M for the fourth quarter.
Of these gains, we see 100,000 from the domestic market, 310,000 from Latin America, and more impressive gains from the EMEA region (570,000) and Asia-Pacific (1.4M). No doubt much of the Q4 growth is anticipated on the back of their ad-supported tier launch later this year.
To add to the subscriber numbers, we have Q3 revenue of $7.92B, a slight reduction on Q2, but still a solid 5.9% year-on-year rise.
The Need for More Momentum
Despite this swing back to positivity, even Netflix co-CEO Reed Hastings has admitted that the company needs to boost its momentum for future growth. The company’s lost subscriber base in Q1 and Q2 led to a spate of layoffs, a pullback in content spending, and a dismal stock price. For now, most growth hopes appear to be pinned on the Q4 launch of their ad-supported tier, which will launch at $6.99. This November launch will pip Disney’s entry into the same market by a month. They also will continue with their disputed crack down on account sharing, although recent developments will allow people to transfer their profiles to new accounts to ease some of the sour feelings around this decision.
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